If the auto worker's wages are so insignificant, why would the Republicans care enough to try and crust them?

The Republicans sent out this little memo, that answers your question:

Quote:

Countdown has obtained a memo entitled "Action Alert - Auto Bailout," and sent Wednesday at 9:12am, to Senate Republicans. The names of the sender(s) and recipient(s) have been redacted in the copy Countdown obtained. The Los Angeles Times reported that it was circulated among Senate Republicans. The brief memo outlines internal political strategy on the bailout, including the view that defeating the bailout represents a "first shot against organized labor." Senate Republicans blocked passage of the bailout late Thursday night, over its insistence on an immediate union pay cut. See the entire memo after the jump.

Today at noon, Senators Ensign, Shelby, Coburn and DeMint will hold a press conference in the Senate Radio/TV Gallery. They would appreciate our support through messaging and attending the press conference, if possible. The message they want us to deliver is:

1. This is the democrats first opportunity to payoff organized labor after the election. This is a precursor to card check and other items. Republicans should stand firm and take their first shot against organized labor, instead of taking their first blow from it.

2. This rush to judgment is the same thing that happened with the TARP. Members did not have an opportunity to read or digest the legislation and therefore could not understand the consequences of it. We should not rush to pass this because Detroit says the sky is falling.

The sooner you can have press releases and documents like this in the hands of members and the press, the better. Please contact me if you need additional information. Again, the hardest thing for the democrats to do is get 60 votes. If we can hold the Republicans, we can beat this.

Government to loan GM and Chrysler $13.4 billion from Wall Street bailout fund so that the embattled auto firms don't run out of cash.

President Bush announced a rescue plan for General Motors and Chrysler LLC Friday morning that will make $13.4 billion in federal loans available almost immediately.

The money will come from the $700 billion fund set aside to bail out Wall Street firms and banks in October.

With these loans, Treasury will have committed virtually all of the $350 billion of that fund that it can hand out without additional authorization from Congress. Once Congress releases the other $350 billion, the two automakers will be able to borrow an additional $4 billion.

GM (GM, Fortune 500) will get $9.4 billion from the first allocation of federal loan money, while Chrysler would get the other $4 billion.

The loans are for three years, but the money will have to be repaid in full within 30 days if the firms do not show themselves to be viable by March 31.

Bush: "Preventing disorderly bankruptcy"

During brief remarks at the White House, President Bush said in normal times he would have not been in favor of preventing a bankruptcy of the two companies. But the current state of the economy and credit markets left him no choice but to act.

"Government has a responsibility to safeguard the broader health and stability of our economy," he said. "If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers."

"In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action," Bush added.

According to CNBC, the government has a 7% profit so far on the first 250 billion that went to the banks, and it also was a pretty big success because it reduced the libor rate significantly. Greenspan thinks another 250 billion into the banks will reduce the libor rate to normal levels.

I don't know where the other 86 billion went (250 for the banks + 14 for the autos + ???)

You realize that each of these bailouts is a loan, and the more loan bailouts they get the harder it will to make a profit when the good time come again... GM sold tons of cars last year and still lost 38 billion, this year will be worse - and they will be doing it with a debt load that grows with each bailout.

Those people are going to get laid off regardless of how many bailouts happen, and the bailouts may make it more likely for an eventual chapter 7 liquidation. If the bailout is used as an excuse to keep people employed who would otherwise be laid off, then I think liquidation is inevitable.

You realize that each of these bailouts is a loan, and the more loan bailouts they get the harder it will to make a profit when the good time come again... GM sold tons of cars last year and still lost 38 billion, this year will be worse - and they will be doing it with a debt load that grows with each bailout.

Those people are going to get laid off regardless of how many bailouts happen, and the bailouts may make it more likely for an eventual chapter 7 liquidation. If the bailout is used as an excuse to keep people employed who would otherwise be laid off, then I think liquidation is inevitable.

I realise everything. What you dont realise, is that money is an illusion that is worth nothing. In five years time, $20 billion is going to be worth jack, the inflation is coming. Dont you see that all this created money pumped in to turn the economy is creating another problem. What do you think is going to happen when the economy turns? Who, and how is all this excess, cheap money going to be mopped up?

Its an excess of cheap money that got us into this mess, an excess of cheap money to solve it, and an excess of cheap money storing up another problem. There are two options here, when the economy turns what do we do with all this excess money? - one option is massive inflation, the other is massive interest rates. Likely a combination of the two.

Republicans and Fundies only consider everything in terms of money and profit. The Republicans treat life as a hedge fund, Fundies treat the afterlife as a hedge fund. The above shows, that neither means anything.

Fortunately, there are people like Madoff, who give us all a glimpse of where the inevitable lies when hedging, deceit, gambling and outright deception are allowed to flourish. Good for him. Now we know the truth. The entire Republican and Fundie Method of Operation is a Madoff ponzi scheme. It serves to rob the people at the base to fund the capstone. When the base cannot be robbed anymore, they are discarded.

But, The entire system has been built using Madoff principles, the only difference is the thin line between a legal ponzi scheme, and an illegal one. Perhaps the only reason there is a legal distinction, is because it is easier to fool everyone about the true nature of reality, if you outlaw the most extreme perversion of it. Comfort in false security.

Republicans oppose the bailout, because they know the time has come to discard the base layer that cannot be robbed anymore. The thought of giving some money back to them makes them puke, because they can only see things in terms of profit and loss.

Fundies oppose the bailout, because their entire reason for existance is to prey on the fallen, and convert them to a perverse form of Christianity. The reason it is perverse, is because although the people themselves may be acting to some form of personal moral righteousness, the reality is, is that they have been naively morally leveraged by another form of profit and loss ponzi scheme business.

Hence the long standing incestial relationship between Fundies and Republicans. One and the same. When the capstone needs repair, there is no limit on funds, when the base needs repair, they call for it to be removed.

Its called a pyramid scheme for a reason - lets think about a physical pyramid...Without stating the obvious - I would dearly love for the base layers to be removed. Not to spite the base, but because of the laws of physics.

But we are not talking about sand and limestone. We are talking about lives, we are talking about turning whole communities into decadent, impoverished, diseased, crime ridden cancerous growths. - At the drop of a hat.

No wonder Fundies are getting excited. Its their territory. Little donkey, Little donkey.....

Lots of things are inevitable for GM etc, everyone here knows this and in a way, everyone expressing an opinion is right. Sure, GM is a dinosaur with crap management, no-one here is denying that. Their cars are from a past era with no future no-one here is denying thatIf it is too survive, is will have to completely restructure its model and that will result in massive job losses no-one here is denying that. Giving money to GM et al, is somewhat lost money, and might add a few dollars to your tax bill no-one here is denying that

But what really matters? Cars, money, business, profit, loss, right, wrong, or life.

But it is a good point that inflation will wipe out the debt, actually I agree with you. It probably won't save the companies, though - as high inflation environments also are hard on "worst of breed" companies.

I realise everything. What you dont realise, is that money is an illusion that is worth nothing. In five years time, $20 billion is going to be worth jack, the inflation is coming. Dont you see that all this created money pumped in to turn the economy is creating another problem. What do you think is going to happen when the economy turns? Who, and how is all this excess, cheap money going to be mopped up?

Its an excess of cheap money that got us into this mess, an excess of cheap money to solve it, and an excess of cheap money storing up another problem. There are two options here, when the economy turns what do we do with all this excess money? - one option is massive inflation, the other is massive interest rates. Likely a combination of the two.

Republicans and Fundies only consider everything in terms of money and profit. The Republicans treat life as a hedge fund, Fundies treat the afterlife as a hedge fund. The above shows, that neither means anything.

Fortunately, there are people like Madoff, who give us all a glimpse of where the inevitable lies when hedging, deceit, gambling and outright deception are allowed to flourish. Good for him. Now we know the truth. The entire Republican and Fundie Method of Operation is a Madoff ponzi scheme. It serves to rob the people at the base to fund the capstone. When the base cannot be robbed anymore, they are discarded.

But, The entire system has been built using Madoff principles, the only difference is the thin line between a legal ponzi scheme, and an illegal one. Perhaps the only reason there is a legal distinction, is because it is easier to fool everyone about the true nature of reality, if you outlaw the most extreme perversion of it. Comfort in false security.

Republicans oppose the bailout, because they know the time has come to discard the base layer that cannot be robbed anymore. The thought of giving some money back to them makes them puke, because they can only see things in terms of profit and loss.

Fundies oppose the bailout, because their entire reason for existance is to prey on the fallen, and convert them to a perverse form of Christianity. The reason it is perverse, is because although the people themselves may be acting to some form of personal moral righteousness, the reality is, is that they have been naively morally leveraged by another form of profit and loss ponzi scheme business.

Hence the long standing incestial relationship between Fundies and Republicans. One and the same. When the capstone needs repair, there is no limit on funds, when the base needs repair, they call for it to be removed.

Its called a pyramid scheme for a reason - lets think about a physical pyramid...Without stating the obvious - I would dearly love for the base layers to be removed. Not to spite the base, but because of the laws of physics.

But we are not talking about sand and limestone. We are talking about lives, we are talking about turning whole communities into decadent, impoverished, diseased, crime ridden cancerous growths. - At the drop of a hat.

No wonder Fundies are getting excited. Its their territory. Little donkey, Little donkey.....

Lots of things are inevitable for GM etc, everyone here knows this and in a way, everyone expressing an opinion is right. Sure, GM is a dinosaur with crap management, no-one here is denying that. Their cars are from a past era with no future no-one here is denying thatIf it is too survive, is will have to completely restructure its model and that will result in massive job losses no-one here is denying that. Giving money to GM et al, is somewhat lost money, and might add a few dollars to your tax bill no-one here is denying that

But what really matters? Cars, money, business, profit, loss, right, wrong, or life.

Quote:

Republicans oppose the bailout, because they know the time has come to discard the base layer that cannot be robbed anymore. The thought of giving some money back to them makes them puke, because they can only see things in terms of profit and loss.

Excellent analysis of the situation. If only the dumb fucks that voted for Bush all those times ( middleclass and poor dumb fucks ) could see how they were only shooting themselves in the foot! But of course they were afraid of the certainty of turbin headed men with a bomb under each arm just because Bush told them so. And besides Bush is the president who cuts their taxes and sends them checks.

Really sad.

Without the need for difference or a need to always follow the herd breeds complacency, mediocrity, and a lack of imagination

Right on schedule. Like I said - Bush gave them enough money to get a month into the Obama term, and now the unions are not backing down. Obama has the choice now of pulling the money back out of the auto makers and forcing them into bankruptcy, or pumping another $100 billion or so into them over the next year.

Door one - he pisses off the auto unions and loses his support, Door 2 - he pisses off the entire lower middle class (particularly in the South where they make autos for healthy companies, and earn less money). Bush was an evil genius - our next president could very well be Mrs. Thatcher revisited.

This has gone on a few weeks longer than I thought it would. Obama is pretty clever, with tough talk making him look like he is being hard on the auto companies, while at the same time he is handing over more money.

This has gone on a few weeks longer than I thought it would. Obama is pretty clever, with tough talk making him look like he is being hard on the auto companies, while at the same time he is handing over more money.

It's a good thing that we've discovered that the true culprits to the economic collapse of America is because of the auto workers. What would we do if we continued to let them work and build shit? I mean, the corporations they work for have been proven to be forthright, honest, sincere and interested mostly in the well-being of the United States.

So I wonder. What else can we do to make sure the American auto worker is destroyed for good?

"The selfishness of Ayn Rand capitalism is the equivalent of intellectual masturbation -- satisfying in an ego-stroking way, but an ethical void when it comes to our commonly shared humanity."

It's a good thing that we've discovered that the true culprits to the economic collapse of America is because of the auto workers. What would we do if we continued to let them work and build shit? I mean, the corporations they work for have been proven to be forthright, honest, sincere and interested mostly in the well-being of the United States.

So I wonder. What else can we do to make sure the American auto worker is destroyed for good?

So I wonder. What else can we do to make sure the American auto worker is destroyed for good?

The auto workers in South Carolina seem to be doing fine - it is the auto unions that destroyed the big three, but I don't think that anyone here is suggesting that they destroyed the economy as a whole. We don't want to continue to let them "build shit", when nobody wants to buy that shit, because it is... well... shit. Also, because we don't want to pay our tax dollars into their shitty companies, just so that they can lose money building shitty shit that nobody wants to buy.

What kind of car do you drive, Northgate?

BTW - GM just announced that they will not pay the June 1 debt payments, so it looks like they made up their mind about bankruptcy.

The auto workers in South Carolina seem to be doing fine - it is the auto unions that destroyed the big three, but I don't think that anyone here is suggesting that they destroyed the economy as a whole. We don't want to continue to let them "build shit", when nobody wants to buy that shit, because it is... well... shit. Also, because we don't want to pay our tax dollars into their shitty companies, just so that they can lose money building shitty shit that nobody wants to buy.

What kind of car do you drive, Northgate?

BTW - GM just announced that they will not pay the June 1 debt payments, so it looks like they made up their mind about bankruptcy.

I was wrong about Obama all along, he did the right thing in the end, thank god.

I was being facetious considering that it's "en vogue" to blame everything on the unions. If you listen to Republicans lately, it's kinda surprising to see them wage war on the American worker like they do. It's as if they're more interested in protecting big business then they are in worker's wages. But oh well.

I drive a Volkswagen. I've always driven Volkswagens.

Regarding them not paying their debt: I wonder how average tax paying, hard working Americans can wiggle out of their obligations like corporate American always gets to. Shit, even the statute of limitations on old debt is useless if zombie debt collectors can manage to keep old debts on your report forever. Or how about back taxes. I'm pretty sure GM will get out of paying those too. Average Americans can't.

"The selfishness of Ayn Rand capitalism is the equivalent of intellectual masturbation -- satisfying in an ego-stroking way, but an ethical void when it comes to our commonly shared humanity."

Regarding them not paying their debt: I wonder how average tax paying, hard working Americans can wiggle out of their obligations like corporate American always gets to. Shit, even the statute of limitations on old debt is useless if zombie debt collectors can manage to keep old debts on your report forever. Or how about back taxes. I'm pretty sure GM will get out of paying those too. Average Americans can't.

What more do you want from GM? The shareholders will be wiped out, and everything goes to the debt holders. They could not do a better job of paying down debt, they just don't have the assets to pay all that they owe. If GM was a person, it would be like they gave everything back to the bank (and the ex-wife/ i.e. employees), including kidneys and any other salable body parts.

Also, I doubt that they owe any back taxes, because it has been a long time since they earned any money.

Right now, this is a battle between the bondholders and the unions - the bondholders are being offered the shaft, and they are ahead of the unions in the bankruptcy pecking order, so they will demand that this goes to BK court (where they will get everything and the unions will get nothing). From what I am reading, the (Bush-era) government bailout of GM was not structured so that the taxpayers are at the head of the line, so all that money was just a gift to the bondholders (and maybe a couple of drops to the unions). The taxpayers would have been a lot better off if GM had gone into structured bankruptcy in November instead of now, we would have saved a lot of money.

WASHINGTON — Two Obama administration officials say Chrysler will file for bankruptcy protection after talks broke down with a small group of the company's creditors.

The officials spoke on condition of anonymity because the filing plan has not been formally announced.

The government had long hoped to stave off bankruptcy for Chrysler, but negotiations with hedge funds that hold its outstanding debt crumbled overnight.

Bankruptcy doesn't mean the nation's third largest automaker will shut down. And Chrysler is expected to sign a partnership with the Italian company Fiat as early as today as part of its restructuring plan.

President Barack Obama is expected to discuss the nation's auto sector at noon.

It won't work out that way, the bondholders are ahead of the UAW in the priority queue. Unless Obama does something illegal, the government should get the whole thing, and the bondholders and UAW should get squat.

"First, the real conditions: limits on executive pay and perks, warrants for non-voting stock, government debt is senior, government can block any large deals (over $100M), no dividends. "

I looked and can't yet figure out how much total money the US and Canadian governments have pumped into Chrysler in the last six months, but it has to be more than the company is worth. Even if the government does not get the whole thing, the bondholders should get any scraps left over, not the UAW, since the bondholder debt is senior to the UAW debt.

Why doesn't BIG OIL bail out the automotive industry? The reason GM, Ford, and Chrysler have refused to make innovative and efficient vehicles is because of their marriage with Exxon et al. It's obvious to everyone that Big Oil killed the EV1. And once all those cars got sent to rot in the deserts of Arizona, the automotive industry said, "screw it, let's build gas guzzling SUVs."

So. Isn't it in Big Oil's interest to keep GM, Ford and Chrysler in the business of making gas guzzlers? So let them spend, what, one quarter's profits (??) and bail them out.

Are you oblivious to the fact that Detroit does make fuel efficient cars? and not only Detroit builds and markets gas guzzlers?

"Who the fuck do you think you're dealing with? We'll have the IRS audit your fund. Every one of your employees. Your investors. Then we will have the Securities and Exchange Commission rip through your books looking for anything and everything and nothing we find to destroy you with."

Blaming the hedge fundsThe president found a scapegoat in the hedge funds that balked at the government's "offer" to take pennies on the dollar for their secured investment
"... It was unacceptable to let a small group of speculators endanger Chrysler's future by refusing to sacrifice like everyone else," he said.

Pardon me while I puke.

Chrysler's secured lenders held about $6.9 billion in debt and a couple didn't want to take significantly less than what they were owed. The lenders that opposed hold less than 10 percent of that debt.

You mean to tell me that the president, who has authorized more than $19 billion in cash to the auto companies, with much of it likely never to be repaid, was willing to force Chrysler into bankruptcy over less than a billion bucks?

It was all BS - they needed bankruptcy to get rid of the excess dealerships, and they needed somebody to blame so that the UAW would continue to vote Democrat. Postponing the bankruptcy like this cost us $100 billion or so, but prevented massive layoffs during the really weak part of the recession, and kept the votes in the Democrat camp.

Obama outsmarted Bush - Bush pushed off the bankruptcy onto Obama, and Obama went trough with it, but blamed "Hedge Funds". When they changed the bondholder conversion deals a while back, they had this whole end game planned out.

I own put options on Toyota - IMHO:

- the bankruptcy of C and GM will have a transitive impact on Toyota via the supplier pain, Toyota may have to bail out some of their suppliers, which they have been squeezing for years down to 1% profit margins. It will suck for them to have to inject equity into low profit, negative growth businesses like that.

- GM and C will come out as viable businesses, and Team Obama is fast tracking that - Toyota has a hard enough time selling cars with hobbled competitors, it will hurt them when GM and C come out of this with now debt.

- Ford will most likely have to go bankrupt as well, just to stay competitive, which will put even more pressure on Toyota. I may buy stock in a post-bankruptcy Ford, they seem to be the best of the US auto companies.